The article reviews the literature for the key markers of high growth firms, which create the majority of new jobs. From the review, a template is developed comprising the key markers. They include: training and experience in entrepreneurship and management; and strategies that emphasise innovation, marketing and employee and organisational learning. High growth firm owners take steps to access management skills that complement theirs through employment of a management team, outsourcing management tasks or making decisions with oversight from an informal board. Good reward structures, which may include ownership interests, are essential to performance of the management team. Access to resources, especially finance and human capital is critical to growth but abundant resources could compromise efficiency. The article finds that personality characteristics of owners and postgraduate education in management are not effective identifiers of high growth firms. Some of the barriers to identifying high growth firms are presented and suggestions made to overcome them.

Lack of access to finance presents a major setback to the development of the Small and Medium Enterprise (SME) sector in Australia. Demand and supply of finance to the sector entails more complex issues than apply to large firms. SMEs have a pecking order of preference for finance; they prefer internal equity to debt and debt to external equity. Nonetheless, a significant number of growing SMEs require external equity. Using the grounded theory method, interviews with six owners and 13 accounting and legal advisors indicate entrenched lack of knowledge about initial public offering (IPO) and the National Stock Exchange of Australia (NSX) among SME owners and their advisors. The study finds that the NSX's poor performance is attributable to lack of visibility, low listings, lack of underwriters, thin trading, inefficient processes and poor location. The NSX is entrenched in a vicious cycle of poor performance that threatens its viability. It is unable to attract sufficient listings to generate the income required for effective operation. Greater exposure of small business advisors to the IPO process should increase demand for public equity through the NSX.

Purpose This paper aims to bridge the gap between theoretical dissertations on the demand and supply for equity by Australian small and medium-sized enterprises (SMEs) and the reality of the capital raising markets. Design/methodology/approach The mixed-methods approach includes questions integrated into a survey of 26,000 SMEs paired with semi-structured interviews with the CEOs or Chairs of the 15 Australian small-scale private equity (SSPE) firms. Findings Contrary to capital structure theory expectations, 46 per cent of Australian SMEs are interested in equity funding, despite a stated ability to acquire additional debt. The authors reveal a mismatch between supply and demand for SSPE with few SMEs able to meet private equity (PE) firms’ stringent investment criteria. Research limitations/implications The population of Australian SSPE firms is small and interviewee responses are qualitative and are not easily replicated. Practical implications To improve SSPE market liquidity, SMEs must overcome severe information asymmetry to demonstrate their quality and reduce the cost of due diligence for PE firms. One relatively easy step is for SMEs to voluntarily adopt auditable financial controls on SMEs similar to publicly traded firms. Originality/value Few studies focus on small firm equity, which is essential to economic growth and innovation. The authors use a large data set of Australian SMEs and unique informationally rich interview data on the population of Australian firms in SSPE, an industry known for its lack of transparency.

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